Price rise hits India hard, govt's steps ineffective
New Delhi: After losing credibility due the series of corruption cases like CWG scam, 2G controversy, Adarsh Housing scam etc., the UPA government at the Centre has also failed to control the rising prices of necessary commodities like onion, garlic etc. in vegetable markets across the country. The rising prices of food items, especially onions, led to a sharp spike in India's annual food inflation to 18.32 per cent for the week ended Dec 25, compared to 14.44 per cent the week before.
When comparing to the Dec 2009 prices of onion and garlic in cities like Delhi, Mumbai, Bhopal, Jaipur, Chandigarh, Jammu, Raipur, Indore, Ahmedabad and Surat with the prices of the same commodities in Dec 2010, it's an established fact that the prices went up by 200-300 per cent in major cities of the country.
While prices of onion touched Rs 80 per kg last month from Rs 12-22/kg in September, garlic is selling at an astronomical Rs 300 per kg as compared to Rs 35-40/kg two months back. Tomato prices too have gone up to Rs 40/kg against Rs 15-20/kg last month.
The prices are likely to increase further with Pakistan deciding to ban its export to India through the Wagah border.
City-wise price rise of onion and garlic
City Onion (2009/2010) Garlic (2009/2010)
Bhopal 12/22 66/185
Raipur 16/37 16/37
Delhi 35/70 65/250
Ahmedabad 18/35 55/180
Surat 19/44 63/206
Mumbai 26/65 63/240
Jaipur 20/65 64/170
Chandigarh 22/70 58/130
Ranchi 21/37 64/204
Lucknow 19/36 80/170
Nagpur 19/34 82/233
Jammu 19/40 50/203
The fifth straight week of rise in food inflation rate, based on wholesale prices, was pushed back to double digits in the second week of December, according to weekly data released by the commerce and industry ministry on Thursday.
The rise in onion prices, due to a crop failure in the main growing regions, and a consistent rise in rates of other essential commodities like vegetables, poultry, milk and fruits have again raised the chances of a rate hike by the Reserve Bank of India (RBI) in January.
According to Thursday's data, the 52-week inflation rate for non-food articles rose to 22.4 per cent for the week ended Dec 25 compared to 21.24 per cent in the previous week.
The inflation rate for primary articles increased to a whopping 20.2 per cent during the week under review, against a rise of 13.25 per cent the previous week.
The index for fuels rose to 11.63 per cent for the week ended Dec 25, compared to 10.67 per cent in the previous week.
The following are the annual rise (2009-2010) and fall in prices of some main commodities that form the sub-index for food articles:
Commodity-wise vegetable price rise/fall (2009-10)
Onions: 82.47 per cent
Vegetables: 58.85 per cent
Fruits: 19.99 per cent
Potatoes: (-)15.45 per cent
Milk: 19.59 per cent
Eggs, meat, fish: 20.83 per cent
Cereals: (-)0.53 per cent
Rice: 1.03 per cent
Wheat: (-)5.4 per cent
Pulses: (-)10.54 per cent
The government has expressed concern over the high price line and assured people that the annual inflation rate will fall to around 5 per cent by the end of this fiscal.
An empowered group of ministers on prices headed by Finance Minister Pranab Mukherjee extended the ban on export of pulses indefinitely, and decide to release additional five million tonnes of wheat and rice to be sold through state-run fair price shops.
UPA govt facing the heat
The onion crisis has appeared again and become a major problem, apart from the issue of corruption, for the UPA government. This issue may adversely affect the prospects of the party in the upcoming state elections.
The prices of onion have gone to the unheard level of Rs 85 per kg. This makes it beyond the reach of the common man.
Reasons behind the supply shortage
The prices of onions have soared to Rs 70-80 per kg in retail markets from Rs 35-40 just a few days ago due to shortage on account of damage to crops in Maharashtra, Gujarat and some southern states because of rains that has triggered hoarding.
"Onion prices will remain high for the next 2-3 weeks and the situation is likely to improve only after that," Food and Agriculture Minister Sharad Pawar told reporters.
New Delhi: After losing credibility due the series of corruption cases like CWG scam, 2G controversy, Adarsh Housing scam etc., the UPA government at the Centre has also failed to control the rising prices of necessary commodities like onion, garlic etc. in vegetable markets across the country. The rising prices of food items, especially onions, led to a sharp spike in India's annual food inflation to 18.32 per cent for the week ended Dec 25, compared to 14.44 per cent the week before.
When comparing to the Dec 2009 prices of onion and garlic in cities like Delhi, Mumbai, Bhopal, Jaipur, Chandigarh, Jammu, Raipur, Indore, Ahmedabad and Surat with the prices of the same commodities in Dec 2010, it's an established fact that the prices went up by 200-300 per cent in major cities of the country.
While prices of onion touched Rs 80 per kg last month from Rs 12-22/kg in September, garlic is selling at an astronomical Rs 300 per kg as compared to Rs 35-40/kg two months back. Tomato prices too have gone up to Rs 40/kg against Rs 15-20/kg last month.
The prices are likely to increase further with Pakistan deciding to ban its export to India through the Wagah border.
City-wise price rise of onion and garlic
City Onion (2009/2010) Garlic (2009/2010)
Bhopal 12/22 66/185
Raipur 16/37 16/37
Delhi 35/70 65/250
Ahmedabad 18/35 55/180
Surat 19/44 63/206
Mumbai 26/65 63/240
Jaipur 20/65 64/170
Chandigarh 22/70 58/130
Ranchi 21/37 64/204
Lucknow 19/36 80/170
Nagpur 19/34 82/233
Jammu 19/40 50/203
The fifth straight week of rise in food inflation rate, based on wholesale prices, was pushed back to double digits in the second week of December, according to weekly data released by the commerce and industry ministry on Thursday.
The rise in onion prices, due to a crop failure in the main growing regions, and a consistent rise in rates of other essential commodities like vegetables, poultry, milk and fruits have again raised the chances of a rate hike by the Reserve Bank of India (RBI) in January.
According to Thursday's data, the 52-week inflation rate for non-food articles rose to 22.4 per cent for the week ended Dec 25 compared to 21.24 per cent in the previous week.
The inflation rate for primary articles increased to a whopping 20.2 per cent during the week under review, against a rise of 13.25 per cent the previous week.
The index for fuels rose to 11.63 per cent for the week ended Dec 25, compared to 10.67 per cent in the previous week.
The following are the annual rise (2009-2010) and fall in prices of some main commodities that form the sub-index for food articles:
Commodity-wise vegetable price rise/fall (2009-10)
Onions: 82.47 per cent
Vegetables: 58.85 per cent
Fruits: 19.99 per cent
Potatoes: (-)15.45 per cent
Milk: 19.59 per cent
Eggs, meat, fish: 20.83 per cent
Cereals: (-)0.53 per cent
Rice: 1.03 per cent
Wheat: (-)5.4 per cent
Pulses: (-)10.54 per cent
The government has expressed concern over the high price line and assured people that the annual inflation rate will fall to around 5 per cent by the end of this fiscal.
An empowered group of ministers on prices headed by Finance Minister Pranab Mukherjee extended the ban on export of pulses indefinitely, and decide to release additional five million tonnes of wheat and rice to be sold through state-run fair price shops.
UPA govt facing the heat
The onion crisis has appeared again and become a major problem, apart from the issue of corruption, for the UPA government. This issue may adversely affect the prospects of the party in the upcoming state elections.
The prices of onion have gone to the unheard level of Rs 85 per kg. This makes it beyond the reach of the common man.
Reasons behind the supply shortage
The prices of onions have soared to Rs 70-80 per kg in retail markets from Rs 35-40 just a few days ago due to shortage on account of damage to crops in Maharashtra, Gujarat and some southern states because of rains that has triggered hoarding.
"Onion prices will remain high for the next 2-3 weeks and the situation is likely to improve only after that," Food and Agriculture Minister Sharad Pawar told reporters.
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